France scraps ‘unthinkable’ five-fold hotel tax hike

A plan to slap a five-fold increase on hotel tax in France has been ditched by France’s National Assembly after lawmakers said that such a steep rise would deal a blow to the country's vital tourism industry.

The National Assembly rejected a bill on Tuesday night that would have seen the “taxe de séjour” (hotel or lodging tax) increase by up to €8 for four and five star hotels from its current level of €1.50 per guest per night.

Lawmakers also rejected the creation of an additional tax of €2 per night for hotels in the Paris region in what is being viewed as a hard-fought win for France’s hotel industry.

The hotel tax will now stay at its current rate of between €0.20 and €1.50 per night, depending on the type of hotel.

Bernard Debré, a lawmaker from the opposition UMP party, welcomed the hotel tax laws defeat, saying that such an increase was “unthinkable”. Debré argued that it would make “tourists pay for our country’s debt, when they are already spending money in our country, helping our economy and providing employment”.

Rifts exposed in ruling Socialists

The proposed law also exposed a rift within the upper echelons of the ruling Socialist party.

The newly-elected Socialist Paris mayor, Anne Hidalgo, was a vocal supporter of the tax hike, stating that guests who fork out more than 600 euros per night for a hotel room could well afford to pay a few extra euros.

But several heavyweights from within the country’s Socialist government – including Prime Minister Manuel Valls, Foreign Minister Laurent Fabius, and Finance Minister Michel Sapin slammed the proposed tax hikes as being "much too high". They backed the hoteliers’ claim that such an increase would deal a serious blow to the tourist industry in France.

The tourist tax hike plan came on the heels of a government plan to increase visitor numbers from the current 83 million a year to 100 million.

Despite its popularity with foreign visitors, the French capital suffers from the reputation of being one of the most expensive cities for hotel rooms.